Recent interest rate cut stimulates buyer activity but fails to shift market balance as sellers remain abundant
New Zealand's residential property market remains firmly in buyers' favour despite increased activity following the recent official cash rate reduction, according to the latest NZHL Property Report by economist Tony Alexander (pictured above).
The February survey, which gathered responses from 432 licensed real estate agents nationwide, showed that while the Reserve Bank's decision to lower the OCR to 3.75% has encouraged more buyers to enter the market, prices remain flat and seller motivation is high.
"The latest official cash rate cut has encouraged more buyers into the market including some more investors," Alexander noted in the report. "However, FOMO remains low, and prices look to be flat according to agents."
A key finding showed auction attendance has improved slightly to a net 19% of agents reporting increased participation, up from 10% in January. Open home attendance remained strong with 43% of agents noting higher visitor numbers.
The report identified several trends shaping the current market:
- A record net 32% of agents report more investors looking to sell properties
- Property appraisal requests have surged to near-record levels with 68% of agents reporting an increase
- First-home buyer activity remains robust with 55% of agents noting increased presence
- Investor participation has recovered to 27%, up from 12% last month, as falling interest rates attract some back to the market
- Buyer concerns about obtaining finance have fallen to the lowest level since 2021
Despite some positive indicators for buyers, the overall market balance continued to favour purchasers, with a net 34% of agents characterizing current conditions as a buyer's market.
"Buyers can see that there are plenty of listings, an abundance of townhouses in some locations, and are not feeling all that confident about the economy and their personal finances," Alexander said in the report.
